Tuesday, November 23, 2010

Australia govt set to impose a tax on online commerce

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More steps are afoot to tax the Australian public. This time it is a corporate business owner who is looking for government favours. The government is taking steps to tax online commerce. Why? Because Gerry Harvey, owner of the retail chain Harvey Norman is not seeing the sales growth that he would like to see. The reason why his sales are flagging is of course because his prices are too expensive. For example, the USB memory sticks which he can buy in China for $4-5, he sells for $40-50. Why wouldn't people look online. If he is worried about the shift in business online, then let him improve his online presence.
In fact I know that he is doing that...but that is not sufficient. He wants to help the government legitimatise the adopting of a new tax, which gives him some market favour. One has to recognise at this point the difference between business people who have integrity and those who don't. It takes more than participation in a market to be a capitalist; there is a philosophy or theory of values underpinning it. Consider that free trade is based upon the 'voluntary' and mutual exchange of goods and services. It is a conditional arrangement. No goods or services, no payment. Compare that with government-sponsored extortion, or those efforts by govt to extort some market advantage through government regulation.
Harvey would have you believe that he is protecting Australian jobs. Nonsense, he is protecting the value of his retail store investments. People don't need to go into his store to find the value of his products, they need only see an online product review, or search for other online sources of information. They are more trustworthy than anything his uneducated sales people might convey because the customer has nothing in writing. They are not accountable, and most do not know what they are talking about.
The reality is that Australians or Kiwis should not be working in retail stores. It is low-value employment; particularly given the trend towards online shopping. The implication is that Harvey is looking at a form of protectionism. These people ought to be studying software, business services, etc. Not wasting time in retail stores.
From the perspective of the government, this is the type of complaint governments love, because it is an excuse to adopt a new tax or extend its taxing powers to another sector. How can people plan their lives if there is a government who is ready to stamp out any commercial opportunity. We recently saw the government jump on the resources industry, wanting to adopt a new resource rent tax. It saw that the resources sector was going to take off...its taken them 20 years to finally realise..and they want a 'piece of the action'. They earned nothing, they take what they live....seemingly under the pretense that they are serving the public interest. All extortionists labour that argument. Altruism is just one excuse to steal from others. Its not a virtue. Its a dirty justification for favouring the weak, who do not know or what to know how to live, at the expense of the virtuous, who know how to live, whose lives the parasites depend upon. If these 'parasites' like Harvey (yes, business is often worse that the humble beggar) are doing nothing but reclaiming some loss because of some grave injustice...then let them recoup it through the court system. It will make a great class action. I would even favour overhauling our court system. Surely with all these taxes we might expect a decent justice system. You might ask...where does all the money go! We don't need any arbitrary law which incorporates a lot of exceptions, creates loopholes, and a resulting litany of failures in execution. We simply need a privately-run court system and common law. Anything else simply exists for the government to justify its role as a middleman.
Harvey acknowledges that online commerce accounts for just 4% of retail sales, but argues that his lost sales growth could become a reality if 'online commerce' doubles. The reality is that he does have advantages in certain areas. He has an advantage in several areas:
1. Old people are less inclined to shop online
2. Certain products are not easily bought online, e.g. bulky or technical
He also has some disadvantages. People can come into his store, ask for advice, examine a product, and then buy online. He has the opportunity to offer products online too. Maybe he could package warranty with store-bought product only. That is after all part of his value-add.

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